Condominium developer Ford Shelley – who is scheduled to report to prison on Wednesday to begin serving a 20-month sentence for mortgage fraud – has asked a federal judge to put that prison sentence on hold, saying he was misled by his former lawyer into pleading guilty to a crime Shelley says he did not commit.
Shelley, who pleaded guilty last year to one felony charge of mail fraud related to sales of units at his Pineapple Bay project on Porcher Drive, also claims prosecutors intimidated him into pleading guilty by threatening to file charges against his wife, Gina, and “throw the book at him” if he didn’t sign a plea agreement, according to court documents filed last week.
“The crux of Shelley’s appeal . . . is that he is actually innocent and entered a plea to something that he has consistently denied, because he was advised that he should,” Bert von Herrmann, a Conway lawyer now representing Shelley, said in court documents.
No court date has been scheduled to hear Shelley’s request and von Herrmann said he is not sure whether Shelley will have to report to prison while the request is pending. Von Herrmann said he has asked for an expedited hearing on the request.
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Shelley also has hired James Parkman III, an Alabama lawyer who specializes in white-collar criminal defense and is part of a national network of lawyers in a firm founded by the late Johnnie Cochran, best-known for his defense of O.J. Simpson. Parkman’s application to defend Shelley in S.C. District Court is pending.
Brown Johnson of Florence, one of the lawyers who represented Shelley through his guilty plea and sentencing, said he cannot comment on Shelley’s court filing without first speaking to his client. Gene Connell, a Surfside Beach lawyer who also represented Shelley, declined to comment, citing attorney-client privilege.
Assistant U.S. Attorney John Potterfield could not be reached for comment Thursday. Potterfield previously has said he cannot comment on pending cases.
Shelley waived his right to appeal his sentence when he signed a guilty plea in October 2011. The only way he can avoid that waiver is by proving he had ineffective counsel or that there was prosecutorial misconduct in his case. Shelley’s court filing focuses on what he calls bad advice he received from his lawyers and their assurances that he would not get prison time prior to pleading guilty.
“Shelley would not have pled guilty to the crime charged, but for trial counsel’s assurance of a no-jail-time sentence,” Shelley’s court filing states.
Shelley’s court filings state that he first learned about his criminal investigation from a telephone call he received from an FBI agent who told Shelley he would be indicted if he refused to meet with authorities. Shelley said he maintained his innocence throughout the investigation. In the fall of 2011, Shelley and his lawyers were asked to meet with investigators at the federal courthouse in Florence, where he was presented with a plea agreement.
“After reviewing the plea agreement, Shelley’s attorneys provided him the document and told him, ‘It’s only one count of mail fraud you’ll get a misdemeanor and go home’,” the court document states, adding that Shelley was told to sign the document that day “or any deal was off the table.”
“Shelley’s attorney told him to accept the agreement because if he didn’t ‘they will dig something up’,” the document states.
When Shelley’s pre-sentencing report was completed in February, it showed the bank that provided mortgages at Pineapple Bay lost nearly $1 million due to Shelley’s fraud. That loss amount increased the amount of prison time Shelley could get under federal sentencing guidelines.
Shelley said in court documents that prosecutors promised they would recommend a light sentence to the judge, stating at one point that they were not opposed to probation and “did not want Shelley to go away because he was the only one that told the truth in the investigation.”
Potterfield, however, did not recommend probation at the sentencing hearing and Judge Terry Wooten sentenced Shelley to 20 months in prison followed by three years of supervised release and restitution of at least $1,000 per month upon his release from prison.
Shelley’s latest request follows documents he filed in October claiming he was duped by a GMAC Mortgage loan officer who assured Shelley that an illegal plan to sell the townhomes was, in fact, legal. That plan called for Shelley to refund buyers 10 percent of their purchase as an “incentive” that was not shown on HUD-1 settlement statements. Shelley said GMAC also approved loans for Pineapple Bay purchases even though it knew the mortgage applications contained false information.
“The fraud of GMAC greatly exceeds any wrongdoing of Shelley,” Johnson said in court documents filed on Shelley’s behalf just prior to a sentencing hearing.
Shelley also is disputing the nearly $1 million that GMAC claims it lost on the Pineapple Bay deals. Shelley said GMAC immediately sold the condo loans into the secondary market as mortgage-backed securities, thereby profiting from the deals rather than losing money.
Four Pineapple Bay buyers previously pleaded guilty to mortgage fraud charges and each were sentenced to between three years and five years of probation plus restitution.
Most of the buyers at the 12-unit Pineapple Bay project included Shelley’s family – including Shelley’s wife, his brother-in-law and sister-in-law – and friends or business associates. The original sale price for each of the 2,250-square-foot condos ranged from $625,000 to $700,000 in 2006, according to county property records. The most recent sales have been for between $135,000 and $157,500, according to statistics from the Coastal Carolinas Association of Realtors.